THRM Butterfly Strategy
THRM (Gentherm Incorporated), in the Consumer Cyclical sector, (Auto - Parts industry), listed on NASDAQ.
Gentherm Incorporated designs, develops, manufactures, and markets thermal management technologies. The company operates in two segments, Automotive and Medical. The Automotive segment offers climate comfort systems, which include seat heaters, blowers, and thermoelectric devices for variable temperature climate control seats and steering wheel heaters that are designed to provide thermal comfort to automobile passengers; integrated electronic components, such as electronic control units that utilize proprietary electronics technology and software; and other climate comfort systems, including neck conditioners and climate control system products for door panels, armrests, cupholders, and storage bins. It also provides battery performance solutions comprising cell connecting devices and battery cable technologies used for various types of automotive batteries, as well as thermal management products for heating and cooling 12 volts, 48 volts, and high voltage batteries and battery modules; and automotive electronic and software systems, including electronic control units for climate comfort systems, as well as for memory seat modules and other devices. This segment serves light vehicle original equipment manufacturers and first tier suppliers, such as automotive seat manufacturers, as well as aftermarket seat distributors and installers. The Medical segment offers patient temperature management systems.
THRM (Gentherm Incorporated) trades in the Consumer Cyclical sector, specifically Auto - Parts, with a market capitalization of approximately $943.3M, a trailing P/E of 41.48, a beta of 1.35 versus the broader market, a 52-week range of 25.76-39.48, average daily share volume of 267K, a public-listing history dating back to 1993, approximately 14K full-time employees. These structural characteristics shape how THRM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.35 indicates THRM has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 41.48 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple.
What is a butterfly on THRM?
A long call butterfly buys one lower-strike call, sells two ATM calls, and buys one higher-strike call, paying a small net debit for a defined-risk position that maxes out if the underlying pins the middle strike at expiration.
Current THRM snapshot
As of May 15, 2026, spot at $30.26, ATM IV 56.80%, IV rank 12.76%, expected move 16.28%. The butterfly on THRM below is built from the same end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 34-day expiry.
Why this butterfly structure on THRM specifically: THRM IV at 56.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a THRM butterfly, with a market-implied 1-standard-deviation move of approximately 16.28% (roughly $4.93 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated THRM expiries trade a higher absolute premium for lower per-day decay. Position sizing on THRM should anchor to the underlying notional of $30.26 per share and to the trader's directional view on THRM stock.
THRM butterfly setup
The THRM butterfly below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With THRM near $30.26, the first option leg uses a $28.75 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed THRM chain at a 34-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 THRM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $28.75 | N/A |
| Sell 2 | Call | $30.26 | N/A |
| Buy 1 | Call | $31.77 | N/A |
THRM butterfly risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
Max profit equals the wing width minus net debit times 100 (reached when the underlying pins the middle strike); max loss equals the net debit times 100. Two breakevens at lower-wing plus debit and upper-wing minus debit.
THRM butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on THRM. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.
When traders use butterfly on THRM
Butterflies on THRM are pinning bets - traders use them when they expect THRM to settle near a specific level at expiration (often the prior close, a round number, or the max-pain strike) and want defined-risk exposure to that outcome.
THRM thesis for this butterfly
The market-implied 1-standard-deviation range for THRM extends from approximately $25.33 on the downside to $35.19 on the upside. A THRM long call butterfly is a pinning play: it pays maximum at the middle strike if THRM settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current THRM IV rank near 12.76% sits in the lower third of its 1-year distribution, where IV often re-expands toward the mean; this favors premium-buying structures and disadvantages premium-selling structures on THRM at 56.80%. As a Consumer Cyclical name, THRM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to THRM-specific events.
THRM butterfly positions are structurally neutral / pin (limited-risk, limited-reward); the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. THRM positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move THRM alongside the broader basket even when THRM-specific fundamentals are unchanged. Always rebuild the position from current THRM chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on THRM?
- A butterfly on THRM is the butterfly strategy applied to THRM (stock). The strategy is structurally neutral / pin (limited-risk, limited-reward): A long call butterfly buys one lower-strike call, sells two ATM calls, and buys one higher-strike call, paying a small net debit for a defined-risk position that maxes out if the underlying pins the middle strike at expiration. With THRM stock trading near $30.26, the strikes shown on this page are snapped to the nearest listed THRM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are THRM butterfly max profit and max loss calculated?
- Max profit equals the wing width minus net debit times 100 (reached when the underlying pins the middle strike); max loss equals the net debit times 100. Two breakevens at lower-wing plus debit and upper-wing minus debit. For the THRM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 56.80%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a THRM butterfly?
- The breakeven for the THRM butterfly priced on this page is no defined breakeven on the modeled curve at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current THRM market-implied 1-standard-deviation expected move is approximately 16.28%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on THRM?
- Butterflies on THRM are pinning bets - traders use them when they expect THRM to settle near a specific level at expiration (often the prior close, a round number, or the max-pain strike) and want defined-risk exposure to that outcome.
- How does current THRM implied volatility affect this butterfly?
- THRM ATM IV is at 56.80% with IV rank near 12.76%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.